|
An Open Letter to the Community
From Former Mayors
Robert K. Tanenbaum and Richard A. Stone
Dear Neighbors,
We are voting
NO
on proposition “H” and have
been asked by some of our friends and neighbors to put down in words the
reasons why we believe that the proposed Hilton project is
NOT
in the best interests of our
city.
At the outset,
please understand that we do not oppose a “conforming use” project,
i.e., one consistent with the letter of the Municipal Code and spirit of
our City’s General Plan, which might generate additional revenues for
our City and add to and, hopefully, enhance the aesthetic quality of the
project locale.
Our devotion to our City can best be summed up as a
commitment to maintaining and enhancing our quality of life by
encouraging and supporting smart, economically sound and code conforming
development. We are inspired in this letter to critique the Hilton
expansion project because of its unsound financial estimates, its
generation of destination gridlock traffic, its inadequate on-site
parking, its massive high rise towers, its 5 to 7 years of construction
phasing, its generation of toxic and unmitigatable adverse environmental
impacts and its negative precedent setting example.
Gridlock Traffic: Beverly Hilton/Waldorf Towers
Expansion
In our judgment the single most aggressive breach of our
City’s General Plan and Municipal Code height and density standards, and
with the potential to alter adversely and permanently the nature and
character of our City, is the Hilton/Waldorf Towers expansion project.
Directly across the street from residential homes and the El Rodeo
School, the Hilton expansion provides for the construction of a 150 foot
tower, the proposed site of the 170 roomWaldorf Towers Hotel, at the
intersection ofWilshire and Santa Monica Blvds, already the busiest and
most heavily trafficked corner in the L.A. area! In addition, the Hilton
plans to construct two high-rise condominium towers located at both ends
of Merv GriffinWay, one tower 18 stories high on the Santa Monica Blvd.
side and a 100 foot tower on the Wilshire Blvd. side. Both towers, taken
together, will comprise a total of 90 condo units.
This Hilton project presents our City with a massive
expansion plan. The expansion will increase the total square footage (s.f.)
from 543,537 s.f. to 970,620 s.f. Notwithstanding that the proposed
expansion will increase in size by almost double the square footage, the
Hilton experts assert that the Hilton’s proposed expansion will not
increase traffic!
Inadequate On–Site Parking
The Hilton is presently under parked. In recent years
the Hilton used the Robinsons-May parking facility, but that parking
will no longer be available. According to our Municipal Code, if the
Hilton were a new project it would require 3,433 parking spaces. Yet,
the Hilton is proposing a total of 1,422 parking spaces, or 41% of that
which the code requires.
Moreover, the Hilton has no planned on-site free parking
for its approximate 700 employees. Given the inadequacy of the Hilton’s
on-site parking, please feel free to conclude where Hilton guests and
its employees will park in the ordinary course, everyday, and
especially, when the Hilton has planned special events. Would it offend
your common sense to suggest that our neighborhood streets will become
an adjunct parking venue for the Hilton?
Unsound Financial Projections
Hilton expansion advocates aver that the new hotel
towers and accompanying existing hotel condo development will
substantially increase revenues to the City. So, they argue, even if
there is enormous discomfiture inherent during the construction phasing,
significant parking deficits, severe height and density issues,
increased traffic and unmitigatable adverse environmental impacts, they
are all trumped because the City needs the money.
This financial needs and economic projection argument is
illusory, creating false reliance and expectations.
Here’s why: First, the Hilton claims that the
expansion project will provide the City with several additional millions
of dollars in added revenue:
1. $6.1 million from the new Waldorf Towers
hotel;
2. $1.6 million from the existing Hilton Hotel,
and
3. $2.55 million from the 90 proposed condos.
Let’s examine each projection to determine whether it
satisfies sound financial analysis and simple common sense. In our
judgment, the Hilton’s economic assumptions are unsound and
profoundly misleading. Each of the cited projected revenue sources
lacks the financial capacity to generate the revenue stream that the
Hilton alleges. Let’s see precisely why:
1.
Waldorf Towers
– the $6.1 million
contribution to the city is an estimate that the Hilton claims will flow
from the 19% transit occupancy tax (TOT). In order for the Waldorf
Towers to spin-off $6.1 million from a 19% TOT, the Waldorf Towers will
have to generate $32 million in gross room revenue.
We assume an average 75% hotel occupancy yearly; then
with 170 rooms, the hotel will have to average a charge of $700 per
night for each hotel room! How many hotels in the L.A. area not only
charge $700 a night for a room, but average $700 a night year round?
2.
Hilton Hotel alleged
contribution
– The $1.6 million in
additional revenues that the Hilton claims it will add to the City’s
treasury is equally illusory. In order for the Hilton to generate the
$1.6 million from the TOT bed tax it will have to increase its existing
room revenue in the amount of $11.4 million.
The reason is that the TOT at 14% for the existing
Hilton Hotel, which is 5% less than the proposed Waldorf Towers, will
yield $1.6 million assuming the Hilton adds $11.4 million in room
revenues at an average 75% occupancy. The thorny problem here is that
the Hilton expansion to accommodate, in part, the new Waldorf Towers
hotel will reduce its room capacity from 588 rooms to 371 rooms, a net
loss of 217 rooms for the Hilton Hotel. So, here’s the rub: with a
decline of 217 rooms and without making any new improvements, the Hilton
wants us to believe that it will increase its room revenue in the amount
of $11.4 million resulting in a $1.6 million TOT, bed tax, contribution
to the City. Isn’t it fair to say that it is much more likely than not
that this Hilton economic forecast is a bit far-fetched?
3.
Hilton Condo Property Tax
estimate – The
Hilton asserts that the 90 residential condo units will yield $2.55
million in additional property tax to our City. Again, let’s do the
math: We know that property is taxed at 1% of its asset value. We also
know the City receives 18% of property taxes paid. So, for the Hilton to
provide the City with its stated $2.55 million in property taxes
annually from its condo units, those 90 condo units will necessarily be
required to have an asset value of $1.4 billion with an annual composite
property tax of $14 million. 18% of $14 million will yield the $2.55
million in alleged property tax contribution to the City.
To accept
the Hilton’s estimate, that is based upon a $1.4 billion asset value
of its 90 condos, the average market value of each condo is $15.5
million! Would it offend common sense to suggest that the Hilton’s
economic projections are seriously wanting in reality and are more the
creation of manipulation and political spin than sound credible economic
logic?
Construction Phasing
Rather than close down the Hilton Hotel in order to
expedite the massive construction, the Hilton wants to phase in the
construction over many years. Experienced observers suggest that the
construction will occur over a period of 5 to 7 years. The Hilton
projects that construction will take 4 years. During these years
of construction, serious concerns arise:
1.
Construction Concerns:
With the Hilton Hotel
open during the construction of the Waldorf Towers and the two condo
tower structures, where will all the trucks carrying cement,
rebar, steel, window glass and all, park? We already know that the
Hilton has provided no on-site free parking for its 700 employees.
Where will they park? In addition, where will the hundreds of
construction workers park? Where will all the construction trucks and
other apparatus be placed during construction since there is no Hilton
Hotel on-site place to mobilize for this massive engagement?
2.
Public Health:
The Environmental
Impact Report (EIR) informs that air pollution, vibration, and noise
from the project will exceed standards and cannot be mitigated.
Residents, school children and personnel at El Rodeo School are directly
across the street. When the toxic air quality reaches dangerous
proportions, who will notify and protect all these people? Is this
Hilton expansion project so important that it justifies putting at
risk so many of our people to these serious adverse environmental
impacts?
Conclusion
Lately, we have been put on notice by its owner that if
the Hilton project does not go forward, he will not come back with a
smaller, modified version. Of course, implicit in that warning is the
notion that the City will lose out on the alleged projected millions
the Hilton estimates will flow from its development. Yet, if the Hilton,
which just a couple of years ago invested allegedly $80 million in a
major renovation, did NOTHING, NO expansion, and with its
projected rate of growth, the estimated revenue to the City in 2012
will approximate in excess of $11 million.
1. In 2003 the Hilton reported its revenues to
the City = $3.6 million;
2. In 2006, the revenues to the city = $6.2
million (Projected out to 2012 at this rate of reported revenue growth,
the City will receive in excess of $11 million).
So, with NO Hilton mega expansion, our City receives
basically an equivalent amount of revenue from the existing newly
remodeled Hilton Hotel, and we are spared years of severe construction
discomfit, increased gridlock traffic and adverse quality of life
impacts.
Precedential Effect:
The precedential
effect of this enormous expansion project in terms of generation of
destination gridlock traffic, high-rise towers, high density build-out
with inadequate parking, and toxic health issues, will adversely impact
our residential community in devastating fashion. For example, what
will prevent the Beverly Hills Hotel, The Peninsula Hotel or others
similarly situated in residential neighborhoods from constructing
150-foot towers or ones similar in nature and design?
In our judgment, if this mega expansion is finally
approved, we’ll regrettably witness the Westwoodization of our City.
We do not want to sit idly by and witness our City degenerate into a
high-rise, asphalt cavernous extension of the Wilshire Corridor. Our
fate rests with our fellow residents who care about our quality of life.
We
respect planned, fiscally sound development that enhances our quality of
life. This project does not meet those criteria.
For these reasons, we have decided to vote NO on Prop “H”.
Sincerely,
Robert K. Tanenbaum,
Former Mayor
Richard A. Stone
Former Mayor
|
